BBAL' ,. CITY OJ' SOMERVILLL 847

and thAt tbiflatter should;therefore be adopted. It must be platn fromwhat has been said that we do not think the language will bear anotherreasonable construction. To hold that it Will, we must ignore the plainintent of. the testatelr, expressed throughout the will, and find that hecontemplated dying intestate as respects the $5,000, not only against thecontrary legal presumption, but also against the plain import of his lan-guage relating directly to the subject-if not indeed against its expressterms. In bequeathing the residue to William he not only takes painsto exc11,idethe $5,000 from the bequest, but speaks of its payment interms which seem to preclude the idea of contingency. The thoughtthat the children might not receive it, under all circumstances, we think,never entered his mind.That thelegacies are charged on the land, is not open to question.

The testatorrningled his real and personal property together and gavethe residue toWilliam"after paying his debts and "the above-mentioned85,000," ,Such language, under such circumstances has been uniformlyheld, in modern times, to create a charge on the testator's land. Lewisv. Darling, 16 How. 1; Fenwick v. ChapfMn, 9 Pet. 461. The rule inDelaware, where this land is located, is shown to be the same, by thedecision in Rambo v. Rumer, 4 Del. Ch. 9.The statl;1tory bond given byWilliam Dean, as executor, was intended

to secure the faithful discharge of his official duties, and had no relationto the payment of this legacy. The time when it might become payablewas uncertain, while the obligations of the bond were limited to sixyears; arid expired long before the legacies became due. The bond didnot, therefore, "secure" its payment, within the terms of the will, as theappellant urges. The decree of the circuit court is affirmed.

BEAL, Receiver, t1. CITY OF SOMERVILLE.

BJJn:1I BANXING-CIJBCXll )'OK CoLLBCTIOll....INSOLTBNCY.A city treasurer deposited checks in a bank, indorsed by him -For depollt,-04

'he checks were immediately credited to him on his pass book, though not in pur-8uance of any agreement to that etrect. He had been a depositor in the bank forsome years, but had no agreement that his checks should be treated as cash, or'hat be should draw against them before collection. The bank became insolven'before the ohecks were colleqted,and their proceeds passed into the hands of areceiver. Held, that no title passed to the bank except as a bailee. and that thedepositor was entitled to the proceeds. 4,9 Fed. Rep. 700, aftlrmed.

Appeal from the Circuit Court of the United States for the District ofMassachusetts.Suit by the city of Somerville against Thomas P. Beal, receiver of

the Maverick National Bank, to recover the proceeds of certain checb.From a final decree for plaintiff, defendant appeals. Affirmed.The allegations of thebiU were, in substance, as follows:

,Q])ERAL REPORTER, voL 50..

(1) Oc:ltober 31, 1891, about a quarter before So'clock tn thetreasurer of the city of.Somerville deposited in the Maverick

Natioql\l pank, in the name and on aecount of saidcity, checks on different'banks, amounting to $21,171.40. (2}'!'he treasurer handed the checks, with<>ther deposits, to the receiving teller, with a deposit ticket, and also his passbook, and. the teller at once credited the total amount of the deposit therein.(S) Each of said checks had stamped on its back the following: "For deposit.JOHNF. COLE, Treas. &C01l. City of Somerville." (4) Afterthebank closed itsdoors on that day, the books of the bank, according to the usual custom, were

and balanced, lIlld the amount of said cheeks were placed to the credit,of said J:lity, and the checks placed in the dearing house drawer, with othercheckS intended for presentation at the clearing house on the following Mon-day. (5) At the time said checks were received by the bank it was irre-trievably insolvent, and made so by the operations of .the president and twoof the directore. It closed its doore at 3 o'clock on said Saturday, and never:resulI)ed business. On the following day (Sunday) it was declared insolvent,an.d thll'bank examineJ; took possession of it, and all its assets and property\Vere held by the examiner until the appointment of said receiver. (6) Onsaid Monday the bank examiner caused the checks to be sent to the clearinf(.house, where they were paid, and the proceeds thereof were transferred to andare held by the receiver, separate from. other funds. (7) The treasurer had·for seve,ral years made deposits with the bank without any special agreementin regard thereto. There was no agreement that checks deposited should be.consid,ered as cash, or that the treasurer could draw against them before col-lection. The treasurer Dever drew a check for which his deposit was not suffi-cient without counting the proceeds of uncollected checks, except in a fewinstances,on a few occasions, by special arrangement with the bank. Therewas no express understanding that the I'hecks should be credited to the city'immediately on deposit, but they were alwllYs so credited on the pass book.at the tim.e of the deposit; and the treasurer did not know whether the books'of the bank were balanced after the close of business on each day, and creditsgiven on the books of the bank for checks deposited on that day, but he didknow that the amount of such checks was at once credited to him on his passbook. (8) The bank, in balancing its books at the close of each day's busi-ness, credited deposits on that day at their face value, without discount; andit was the custom of the bank, on any of such checks being returned fromthe clearing house llncollected, forthwith to charge off to such depositor theamount of such check, and thus cancel the credit. (9) !twas the practice'of the Maverick and the other banks in Boston, in some cases, to allow de-positors to dhiw against checks deposited before such checks are collected,and in some cases not, dependinK upon the bank's opinion of the reliability,of the depositor and the makers of the checks. (10) The treasurer, at thetime of making said believed the bank was solvent, and had no.knowledge or means of knowing of its insolvency.. A to the bill was overruled, (49 Fed. Rep. 790,) and after-wards the case was heard by agreement on the facts stated in the bill,and the further agreed fact "that the officers of the hank had no knowl.edge of the inaolvency of the banJt at the time the deposits were made,unless such knowledge is to be inferred as a matter of.1aw from the factsstated in the billi" and a final decree for plaintiff was rendered thereon.Hmchina &: Wheeler, (Edward W. Hutchinll, Henry Wheeler, and Frank D.

Allen, of counsel,) for appellant.Selwyn Z.Bowman, for appellee.Before PUTNAM, Circuit Judge, and NELSON and CARPEN'IER, District

Judges.

BEAL tI. CITY OJ' SOMERVILLB. 649

PUTNAM, Circuit Judge. The conclusion of the circuit court in thiswas consonant with justice, and it is therefore gratifying that this

court finds that the law requires its affirmance. The transaction wasprimarily a deposit of the checks, with, secondarily, a duty to be per-formed concerning them by the Maverick National Bank. The fact thatthe checks were expressly indorsed "For deposit" does not change thenature of what occurred in this instance, as there are no intervening equi-ties, although it emphasizes it. The paying of actual money by a cus-tomer into a bank of deposit does not create a bailment, because, by thesettled custom, recognized by the supreme court of the United States,the house of lords, and numerous other courts, the bank is authorizedto mingle the money at once with its general fund, creating immediatelythe relation of debtor and creditor, subject by further custom to draft inthe usual course of business. But, with reference to the checks claimedby the city of Somerville, the word by which the transaction is ordinarilydescribed may conveniently have, and therefore should have, its fullnatural force and meaning. A mere deposit would only require a bankto keepibut a usage requiring the Maverick to do in this case somethingmore has continued so long, and is so notorious and universal, that thelaw can take judicial notice of it, and it happens that its terms andlimitations cannot be mistaken. The bank must use due diligence. tocollect; and, as collections are completed1 the bank no longer holds theavails as bailee, but is authorized to mingle them with its other funds,and th.us itself a debtor. This, of course, makes the entiretransaction something more than a mere deposit, in any proper senseibut this word well gives color to all that follows, and converts all that isdone between the customer and the bank, to and including the actualturning of the checks into money, into locatio opem, according to itsmeaning as explained by J lldge Story in his work on Bailments, c.6, art. 2. Aside from the right of the bank to constitute itself a debtorfrom the time the checks are converted into cash, or its equivalent, in-stead of a mere tru8tee or agent, no qualification of the strict legal rela.-tions created by a bailment is deducible from the general nature of thetransaction, the terms in which it is expressed, or the settled custom, oris shown by the appellant.It rests on the appellant to Bupport affirmatively his claim to such

departure from the ordinary rules which the law applies to a depositor other bailment, as is covered by his proposition that the bank fromthe instant of the deposit became a debtor for the amount of the checks,or their general owner, either with or without a right of return in theevent of inability to collect. Such a position would reverse all the prin.ciples applicable to the simple transaction of a deposit, or other bail-ment, and cannot be sustained except by evidence of a special agree-ment, or of such practice or custom as would be equivalent thereto.If appellant showed that the city had a legal right to draw against thecheck!> from the instant of their deposit, so absolute that the bankcould not lawfully suspend it by notice or otherwise, pending theircollection, this would tend to support his position throughout. But

650

the nin'thparil.graphof the bill, which is admitted and is relied on' bythe appelllmti iweighs against him. Appellant is' in error in diseuse-ing this paragraph as though it bore on a custom, in any proper senseof the word, :which the city is holden to prove. As alleged, it relatesto a practiee of some banks/which mayor may not apply to them all,and which iuufficient in this case if it applies to the Maverick. Thepractice, as alleged, is like any course of action by which a corporationor indiyidual indicates that an option is reserved. If the paragraph ad-mitted in terms that the practice had been acquiesced in by the city, orgenerally by the customers of the it would show conclusivelyan option on the part of the bank wholly inconsistent with any theoryexcepHhat of:bailmen.t. As it stands, its weight, although not verygreat, :isnecessarily against the appellant. '!'he first impression com-ing from thefact that the deposit was immediately·entered to the creditof the city on its pass book favors the view of the appellant; but a care-ful consideration will demonstrate that this was a mere matter of con-venience,iapd the entry would have been the same on either theory, aswas illustrated in Manu!aetur:t:r,' Nat. Bank v. CQntinental Bank, 148 Mass.653, 20 N. E. Rep. 193, and Railway Co. v. Johnston, 133 U. S. 566,10Sup. Ct. Rep. 390. On the other hand, the appellant fails to show thatthe city had an absolute right to check against the deposit as soon asmade, irrevocable by notice from thebankj and that such right did notexist must be received by this court as a matter of judicial knowledge,notwithstanding the-parties in Moor, v. Goddard, 147 Mass. 287, 17 N.E. Rep. and the complainant in this case, seem to have regardedit necessary to prove the practice of a particular bank with reference tothis matter., This is inconsistent with any theory except that the bankis a bailee of deposited· checks until they are collected; as is also the ad-mitted faetthat the bank is entitled to return to its customer an uncol-lectible check,though he neither indorses it nor gives any special agree-ment to that effect.· The appellant fails to @how any obligation to re-ceive back such checks, except what;arises from the nature of the trans-action, unless from special custom; and it is more in harmony withfundamentailprinciplesi to presume that this right to return grows outof the former than the latter. It strains the law to convert the naturalincidents ora 'bliilment into a right of an entirely different character, tobe sustained, if at all, by s. cnstom violative of the ordinary rules govern-ing analogous transactions. No autnorities have been cited or foundwhich bind 'this court to the contrary ofwhat is hereinbefore expressed.Railway 00. v.uolvn8thn. t88 U. S. 566, 10 Sup. Ct. Rep. 390, is not inpoint, a$ the paper in qUEl8tion in that case wasnqt a check, but a sightdraft, and the ,decision wasmRde to rest mainly on the ground of fraud,as wasetated by the learned judge from whose decree in the circuit courtthislf.ppeal1tutllken. Fltparte Richdale, 19 Ch. Div. 409, is criticizedin Balbach v.JJflrt1:i.nghwysen, .16 Fed. Rep. 675. It can be added towhat is iSIlid that,sofar as the 'Cl1setouches this at bar, the differ-ent judges who sat in the court of appeal used essentially varying ex-ptessions, au of which were unnecessary, beyond the proposition that the

moat tI. CITY Q1l' SOHERVILI& 651

in question was, under the special circumstances, a holderfor value. Bank v. Loyd, 90 N. Y. 530,so much relied on as establish-ing an absolute title in the bank from the instant the checks were de-posited, may perhaps settle the law for the state of New York. It ap-parently was so considered by Judge WALLACE as late as 1886, as statedin Railway 00. v. Johnstnn, 27 Fed. Rep. 243. The law of New Yorkwas especially found by court of Massachusetts to be asstated in Bank v. Loyd, in Brooks v. Bigelnw, 142 Mass. 6,6 N. E. Rep.766, and though perhaps not of importance, yet it is noteworthy thatthe parties deemed it necessary to prove the rule of that state as thoughlocal and peculiar, and not to be gathered from the common law. Bankv. Loyd is discussed by the supreme court in Railway 00. v. Johnston, al-ready cited; and its effect is stated (page 575, 133 U. S., and page 392,10 Sup. Ct. Rep.,) to be in substance that a transfer by a bank of a draftdeposited for collection, and indorsed generally, would confer title byreason of "reputed ownership." This was the pith of the New York de-cision; the question being, not as to title between the primary bank andits customer, but between the latter and another bank to which the drafthad been remitted. Bank v. HubbeU, 22 N. E. Rep. 1031, 117 N. Y.384, (decided November 26, 1889,) can be from the caseat bar only by the fact that in the former the checks were expressly in-dorsed "For collection." They were charged by the depositor to thebanker simultaneously with forwarding them, and were in like mannercredited at once on reception and before collection, and such as wereprotested were charged back. The banker did not keep the proceeds ofthe collections distinct, nor remit them specifically; but they were

with his other funds, and remittances of balances were madeeach week. These covered the existing credits on the books of thebanker, whetht'ror not at that time collected. This method of businesshad continued for many years. Notwithfltanding the checks were in-dorsed specially "For collection," the transactions as a whole were iden-tical in substance with those usual in connection with a deposit as madein the case at bar; and the course of and the practical con-struction given them by the parties were precisely the same as thoughthe checks had been indorsed generally. The special indorsements ef-fected nothing, except to give notice to a· transferee or other stranger.They were covered into the transactions, and added nothing to them;because checks delivered a banker are "for collection" in any view. Thechecks were accompanied with letters stating that they were inclosed"for collection and credit." The court said that this amounted to a di-rection to credit after the collection; but the practice was to credit be-fore, so that the letters of advice were thus actually superseded. More-over, as already said about the word "collection," the word '·credit"added nothing, and was covered into the transactions, because the bankerwould do this in any event, unless instructed to remit specially. Inthis case the court of appeals held that the title to the checks remainedin the depositor while they were uncollected. In Balbach v. Freling-huysen, already cited, the United States circuit court for the district of

nDEBALBEPOR'1'JllB, vol. 50.

New JeM,;Wd down as the of its considerations the rule that abank is,'Witil collection, a bailee of checks deposited, or agent of itsQustomersdepositing. Morse, Banks, (3d Ed.) § 187, says:"The best opinion is that checks on the depositary, credited as cash, form

Ii general deposit, in the absence of agreement or usage to the contrary, andthat other paper credited as cash is also received on general deposit, subjectto the right of the bank to cancel the credit if the paper is dishonored with.out its fault."Section 586 says:"When a customer deposits a check on another bank, without any special

contract, the property remains in him, a,nd the bank is his agent until it hasnotice that the correspondent bank has received the money and credited it,"There are many dicta and general expressions touching this matter,

some of which had in view the solving of other issues, and some of whichwere built up from the first class without recognizing the method of its

.So far as this appeal is concerned, this court must maintain it-self asa tribunal of final jurisdiction, notwithstanding the possibilitythat the case may in some form rench the Impreme court. If we had adetermiqation in point from that court, it would necessarily conclude us;and, if the question at issue had been met by the United States circuitcourt of appeals in any other circuit, we should, of course, lean stronglyto harmonize with it; \;Jut we are obliged to proceed. without either.Although, whenever the law is very doubtful, or the propositions com-pncated, this courtmay deri"!e great aid from dicta, expressions of learnedjudges or text writers, or decisions of local tribunals, it cannot permititself to be bound or embarrassed by them, when the facts naturally and6!lsily lead to such just conclusions as we now seem required to accept.We do not find it necessary to consider the other propositions involvedin the case. The decree of circuit court is affirmed, with costs.

HITCHCOCK V. BARRE'rT.

HITCHCOCK et al, 11. BARRETT et al.

(Oircuit Vourt, E. D. New York. May 2,18112.)

653

RAILROAD COMPANIES-LEASE-RESCISSION.,Vhere the directors of a railway company enter into a contract with third per-

sons, wherebyI' new company is organized, franchises secnred, and a road builtand leased to t,he old company, and the profits realized from the transaction areequally divided between the directors and the third persons, the latter are not lia-ble for their profits, even though exorbitant, on suit by stockholders of the oldcompany. unless the contract of lease is rescinded, and the road restored to the newcompany.

In Equity. Bill by Hitchcock Iud others, as stockholders of the Brook-lyn Elevated Railroad Company, against Barrett and others, to restrainthe latter from exercising any acts of ownership over certain shares ofstock, and to enjoin the company from recognizing their claim toutletherein. Injunction denied.Julien T. Davie8,Wheeler H. Peckham, and a. J. G. HaU, for plain-

tiffs.Geo. W. Wingate, Edmund Wetmore, and Wm. H. Paige, Jr., for de-

fendants.

WALLACE, Circuit Judge. 1 am so strongly of the opinion that thereis no ground upon which this suit can be maintained that I must declineto grant the interlocutory injunction which has been applied for. Thisbill is filed by certain stockholders of the Brooklyn Elevated Railroad-Company, against that corporation and one Barrett, to restrain the latterfrom exercising any acts of ownership upon 23,792 shares of stock of therailroad company, from voting thereon at any election of stockholders-of the railroad company, and to enjoin the railroad company from recog-nizing any title of Barrett to such shares. The plaintiffs allege that the,corporation is controlled by directors who affiliate with Barrett, and re-fuse to protect the interests of the corporation. The substantial facts arebriefly as follows: Prior to the 1st day of February, 1887, the ElevatedRailroad Company, shortly designated as the" Brooklyn Company," was-operating its railway over various streets in the city of Brooklyn, andanother elevated railway company, shortly designated as the "Union.company,"owned franchises, which theBrooklynCompany had attemptedunsuccessfully to obtain, for constructing and operating a railway over:lertain other streets in the city of Brooklyn. Each company was a cor-poration organized under the laws of the state of New York. It was de-sirable for the Brooklyn Company that tHe railway of the Union Com-pany should be built, and, when built, that the properties of the two.corporations should be merged and opEJrated under one management.The Union Company had been organized in June, 1886, by Messrs. Win-gate, Cullen & Barrett, upon an understanding with Messrs. Lauterbach.&.Pettus that the former should effect the organization and secure, thefranchises, and the latter should provide the money to pay all the ex-penses and build the railway, and that the profits arising from the trans-